Return on ad spend. Revenue generated for each unit spent on ads.

How do I calculate ROAS?

Divide revenue from ads by ad spend.

ROAS vs ROI: what is the difference?

ROAS uses revenue and counts only ad spend. ROI uses profit and counts all costs.

Divide 1 by your gross margin as a decimal. A 40% margin gives 2.5x.

ROAS is revenue earned per unit of ad spend. 240,000 revenue on 60,000 spend is 4x.

ROAS ignores margin. At a 40% margin you need 2.5x just to break even. At 20% you need 5x. Many accounts chase a ROAS target without checking this.

Also check attribution. Platform-reported revenue often counts sales that would have happened anyway, so compare with your own sales data.